Federal Deposit
Insurance Corporation

September 16, 2004

Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th St. NW 20429

RE: MN 3064-AC50, Community Reinvestment Dear Mr. Feldman:

As Executive Director of Select Milwaukee, Inc., a nonprofit homeownership organization that assists low and moderate income families achieve homeownership, I am writing to express my opposition to scaling back Community Reinvestment Act (CRA) requirements for mid-sized banks. CRA has been vital to increasing housing and homeownership opportunities in Milwaukee for modest-income families. The changes to CRA proposed by the Federal Deposit Insurance Corporation will create yet another obstacle to homeownership for these families.

Currently, banks with over $250 million in assets are tested on their number of loans, investments, and services to low and moderate income communities. The FDIC's proposal would eliminate the investment and service requirements for all banks with under $1 billion in assets. As a result, significantly fewer purchase mortgages, rehab loans and investments in new affordable housing would be available to our customers and the Milwaukee neighborhood housing market. The FDIC proposes that exams no longer evaluate the number of branches mid-size banks maintain in low-and moderate-income communities. This can only fuel the explosion of predatory and payday lending in lower income neighborhoods in Milwaukee.

In the scaled-back CRA exam, the FDIC would allow mid-sized banks to choose which community development activities they will undertake. Currently, these banks must make community development loans, investments, and services. The proposed test would allow these banks to choose only one of the three activities. The certain result will be less community development activity and less housing opportunity for modest-income families.

The proposed changes undermine CRA's mandate to lenders to meet community needs. CRA has been instrumental in helping low- and moderate-income families achieve the American Dream of homeownership. It has critical in the redevelopment of many neighborhoods in Milwaukee.

I urge you to drop the FDIC, proposed CRA changes.

Sincerely,

Raymond Schmidt
Executive Director
Select Milwaukee, Inc.
2209 N. Dr. Martin Luther King, Jr. Drive
Milwaukee, Wisconsin 53212
(414) 562-5070 Telephone • (414) 562-5072 Facsimile